Nick Bearns writes at the World Socialist Web Site (click the title of this post for the entire piece):
What has taken place is not the bailout of Ireland. Rather, the Irish government has agreed to the demands from international financial markets that all the resources of the state be deployed to ensure that all Irish debts and financial assets held by banks and financial institutions are paid in full, at the expense of the working class. In other words, it is not “Ireland” that has failed and requires a bailout, but the holders of Irish debt—the European and international banks. [emphasis added]
The agreement is expected to cost Irish families an additional €4,000 each, on top of the €4,000 they are estimated to have lost already. And, as if to emphasise that there is no line it will not cross in order to meet the rapacious demands of the financial markets, the government agreed that pension funds would contribute €17.5 billion to the bailout.
No sooner was the agreement announced, however, than the financial wolf pack began lining up its next target … Portugal, Spain or possibly Belgium.
The deepening European financial crisis underscores the fact that the collapse of the US investment bank Lehman Brothers in September 2008 was not the result of a cyclical downturn, which would be followed by “recovery”, but marked the beginning of a breakdown of the entire post-war global capitalist order.
The onset of the US financial crisis in 2007 had an immediate impact on European banks. They had been either directly connected to the sub-prime operations of the US finance houses, as in the case of Germany’s state banks, or engaged in similar speculative activity.
If that were all there was to it, the crisis would have been over by now. But the initial bankruptcies were only the expression of far deeper contradictions within the global capitalist economy.
Since the beginning of the 1980s, following the end of the post-war economic boom, world capitalism has been characterised by what could be called the rise and rise of financialisation. One significant statistic points to the extent of the process. Some three decades ago, the stock of global financial assets was equivalent to around 100 percent of world GDP. By 2007 it had risen to 350 percent.
The implications of such a vast shift are now manifesting themselves in the deepening debt and financial crisis.
Notwithstanding the delusions of various financial spokesmen that money can somehow, by its very nature, indefinitely beget money, financial assets represent, in the final analysis, a claim on the wealth produced by social labour, in particular, the surplus value extracted from the working class in the process of capitalist production. ...
The so-called Irish bailout is only the beginning. The financial markets are demanding not just a limited period of austerity, but the destruction of the entire post-war European social welfare system.
At the same time, the austerity measures being imposed now create the conditions for a vicious economic cycle, in which low growth exacerbates the economic crisis, leading, in turn, to deepening debts and insolvency—of banks, financial institutions and even governments.
The future of the European Union itself is in doubt, threatening a return to the intra-European conflicts that led to two world wars. National conflicts and divisions are on the increase. Writing in yesterday’s Financial Times, head of the Madrid Office of the European Council of Foreign Relations, José-Ignacio Torreblanca, blamed Germany for the mounting economic problems confronting Spain.